Broker Check

The RFG Weekly Wealth Report

July 25, 2016
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Like a cool breeze on a hot day, the post-Brexit market rally has soothed investors.

The CBOE Volatility Index (VIX), also known as the fear gauge, fell significantly during the past few weeks, according to CNBC.com. The VIX measures investors' concerns about future volatility. The lower the Index is; the calmer investors are about the future. In late June, the VIX rose as high as 25.76. Last week, it hovered around 12.

The relative serenity of investors has been good for markets. By the middle of last week, the Dow Jones Industrial Average (Dow) and the Standard & Poor's 500 Index (S&P 500) were at record highs. Not everyone is convinced investor positivity is a good sign, however. Barron's explained:

"After nearly two years of sideways trading, albeit with some large swings, the indexes finally gave what should be an important buy signal. But is it really? ...What really bothers me is the lack of dissent in the bullish chorus."

Contrarians, investors who use popular opinion as a gauge of what not to do, may find themselves leaning toward pessimism.

FAKE CHARITIES ARE ON THE LIST. Groups masquerading as charitable organizations to solicit donations from generous-minded individuals are among the twelve cons named in the Internal Revenue Service's (IRS) 'Dirty Dozen,' a list of common scams targeting taxpayers.

Americans tend to be a generous bunch. During 2015, they gave more than $373 billion to charities, setting a record for the second year in a row, according to GivingUSA.org.

Millions more may have gone to groups pretending to be charities. The IRS offered some recommendations for avoiding scams. Before you give, get the exact name of the charity. Many fake charities use names that sound similar to those of legitimate charities.

Also, request the charity's employer identification number and use the IRS's Exempt Organizations Select Check search tool to review the organization's tax status and filings. (While you're at it, you may want to review how much the charity spends on fundraising versus programs to confirm it is spending donations judiciously.)

Once you've done your homework, don't give cash. Making your donation by check or credit card provides a record for tax purposes and is more secure.

Finally, no matter how kind a charity's representative seems on the phone or in person, do not give him or her personal financial information or other important identification data, like your Social Security number.

Quote of the Week

"You are never too old to set another goal or to dream a new dream." 

--C. S. Lewis, British novelist

Golf Tip of the Week

Don't Shift Too Early

Many golfers lose power in their shots by prematurely lifting their right foot and shifting their weight to the left too early. Boost power and distance by keeping your weight behind the ball and anchoring your right foot before impact, driving more power into the shot. After contact, shift your weight smoothly to the left.

Financial Question of the Week

Why should I create a retirement projection?

In a recent Financial Finesse study on the State of U.S. Employees' Retirement Preparedness, fifty-seven percent of employees at pre-retirement age, between 55 and 64, said they had not run a calculation to estimate whether or not they were on track to achieve their income goals in retirement. According to the study, after evaluating those who did not know if they are on track, an average wellness score of only 4.7 out of 10 was realized.

Planning for retirement today poses challenges past generations did not have, making retirement a more difficult goal to reach. These challenges include:

  • Decreased Social Security and other government benefits
  • Lower market returns and interest rates on investments
  • Lower home equity to rely on due to the mortgage crisis
  • Higher healthcare costs and longer life spans to plan for

Determining if you are currently on track to meet your goals is one of the first steps to developing a sound retirement plan. The sooner you take control of your financial situation, the greater your odds of a successful retirement.  Please contact my office if you would like help evaluating your progress toward your financial goals.